Firm Brochure Abens Financial Services, Inc. 4920 Lincoln ...

[Pages:18]Firm Brochure

(Part 2A of Form ADV)

Abens Financial Services, Inc. 4920 Lincoln Drive

Minneapolis, MN 55436 P: 952-933-9650 F: 952-933-9680 afs@

This brochure provides information about the qualifications and business practices of Abens Financial Services, Inc. If you have any questions about the contents of this brochure, please contact us at: 952-933-9650, or by email at: afs@. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission, or by any state securities authority. Additional information about Abens Financial Services, Inc. is available on the SEC's website at adviserinfo.

March 23, 2011

Abens Financial Services, Inc.

Material Changes

Annual Update Our Firm Brochure will be updated annually by March 31 of each year and, in addition, as Material Changes occur.

Material Changes since the Last Update Abens Financial Services, Inc. Form ADV Part II has been reformatted. The U.S. Securities and Exchange Commission issued a final rule in July 2010 requiring advisors to provide a Firm Brochure in narrative "plain English" format. The new final rule specifies mandatory sections and organization. In addition, the Proxy Votes policy has been updated.

Full Brochure Available Whenever you would like to receive a complete copy of our Firm Brochure, please contact us by telephone at: 952-933-9650 or by email at: afs@.

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Table of Contents

Material Changes............................................................................................................ i Annual Update ............................................................................................................ i Material Changes since the Last Update .................................................................... i Full Brochure Available ............................................................................................... i

Advisory Business ........................................................................................................ 1 Firm Description......................................................................................................... 1 Principal Owners........................................................................................................ 1 Types of Advisory Services........................................................................................ 1 Tailored Relationships ............................................................................................... 1 Types of Agreements................................................................................................. 1 Advisory Agreement for Asset Management Services ............................................... 1 Financial Planning Agreement ................................................................................... 2 Business Planning Agreement ................................................................................... 3 Hourly Planning Engagements................................................................................... 3 Termination of Agreement ......................................................................................... 3

Fees and Compensation............................................................................................... 3 Description................................................................................................................. 3 Fee Billing .................................................................................................................. 4 Other Fees................................................................................................................. 4 Expense Ratios.......................................................................................................... 4 Past Due Accounts and Termination of Agreement ................................................... 4

Performance-Based Fees ............................................................................................. 5 Sharing of Capital Gains ............................................................................................ 5

Types of Clients............................................................................................................. 5 Description................................................................................................................. 5

Methods of Analysis, Investment Strategies and Risk of Loss................................. 5 Methods of Analysis................................................................................................... 5 Investment Strategies ................................................................................................ 5 Risk of Loss ............................................................................................................... 5

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Disciplinary Information ............................................................................................... 7 Legal and Disciplinary................................................................................................ 7

Other Financial Industry Activities and Affiliations ................................................... 7 Affiliations .................................................................................................................. 7

Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ........................................................................................................................... 7

Code of Ethics............................................................................................................ 7 Participation or Interest in Client Transactions........................................................... 7 Personal Trading........................................................................................................ 8

Brokerage Practices...................................................................................................... 8 Selecting Brokerage Firms......................................................................................... 8 Best Execution ........................................................................................................... 8 Soft Dollars ................................................................................................................ 8 Order Aggregation ..................................................................................................... 8

Review of Accounts ...................................................................................................... 9 Periodic Reviews ....................................................................................................... 9 Review Triggers......................................................................................................... 9 Regular Reports......................................................................................................... 9

Client Referrals and Other Compensation .................................................................. 9 Incoming Referrals..................................................................................................... 9 Referrals Out.............................................................................................................. 9

Custody.......................................................................................................................... 9 Account Statements................................................................................................... 9 Performance Reports............................................................................................... 10 Net Worth Statements.............................................................................................. 10

Investment Discretion................................................................................................. 10 Discretionary Authority for Trading........................................................................... 10 Limited Power of Attorney........................................................................................ 11

Voting Client Securities .............................................................................................. 11 Proxy Votes ............................................................................................................. 11

Financial Information .................................................................................................. 11 Financial Condition .................................................................................................. 11

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Business Continuity Plan ........................................................................................... 11 General .................................................................................................................... 11 Disasters.................................................................................................................. 11 Loss of Key Personnel ............................................................................................. 11

Information Security Program.................................................................................... 12 Information Security and Privacy Notice .................................................................. 12

Brochure Supplement (Part 2B of Form ADV) .......................................................... 13 Education and Business Standards ......................................................................... 13 Arnold D. Abens Jr................................................................................................... 13

TOC 3 Abens Financial Services, Inc.

Advisory Business

Firm Description Abens Financial Services, Inc., was founded in Minneapolis, Minnesota in 1987 as a full-service financial services company. We are Client-Focused and Vision-Directed, striving to provide our clients with the highest standard of personal service and independent, professional advice.

Principal Owners Arnold D. Abens Jr. is a 50% stockholder. Jennifer L. Abens is a 50% stockholder.

Types of Advisory Services Abens Financial Services, Inc. provides investment supervisory services, also known as asset management services and furnishes investment advice through consultations.

On more than an occasional basis, Abens Financial Services, Inc. furnishes advice to clients on matters not involving securities, such as financial planning matters, taxation issues, and trust services that often include estate planning.

As of year end 2010, Abens Financial Services, Inc. manages approximately $53 million in assets for approximately 90 clients. All assets are managed on a discretionary basis.

Tailored Relationships The goals and objectives for each client are documented in our client relationship management system based on questionnaires and/or interviews with the client.

Types of Agreements The following agreements define the typical client relationships. Other agreements may be drafted according to client need.

Advisory Agreement for Asset Management Services Abens Financial Services, Inc. ("AFS or Advisor") in its capacity as a registered investment advisor offers asset management services to clients whereby assets are managed and directed by and through the advisor through the Advisory Agreement for Asset Management Services ("AM Agreement"). Asset management services are based on such factors as the client's financial situation, cash flow needs, risk tolerance, and investment objectives.

The annual AM Agreement fee is based on a percentage of the investable assets according to the following schedule:

1.50% on the first $1,000,000;

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1.20% on the next $2,000,000 (from 1,000,001 to 3,000,000); 1.00% on the next $2,000,000 (from 3,000,001 to 5,000,000); 0.85% on the next $5,000,000 (from 5,000,001 to 10,000,000); and 0.75% on the assets above $10,000,000. Current client relationships may exist where the fees are higher or lower than the fee schedule above.

Assets are invested primarily in stocks (equities), no-load or low-load mutual funds and exchange-traded funds, usually through discount brokers. Investments may also include: warrants, corporate debt securities, commercial paper, certificates of deposit, municipal securities, investment company securities (variable life insurance, variable annuities, and mutual funds shares), U.S. government securities, options contracts, futures contracts, interests in private equities and limited partnerships.

Fund and insurance companies charge each shareholder an investment management fee that is disclosed in the fund prospectus. Discount brokerages may charge a transaction fee for the purchase of some funds.

Stocks and bonds may be purchased or sold through a brokerage account when appropriate. The brokerage firm charges a fee for stock and bond trades.

A portfolio may include investments in private equities, or in limited partnerships or companies in which the owners of Abens Financial Services, Inc. have an interest.

Financial Planning Agreement A financial plan is designed to help the client with all aspects of financial planning without ongoing investment management after the financial plan is completed.

The financial plan may include, but is not limited to: a net worth statement; a cash flow statement; a review of investment accounts, including reviewing asset allocation and providing repositioning recommendations; strategic tax planning; a review of retirement accounts and plans including recommendations; a review of insurance policies and recommendations for changes, if necessary; one or more retirement scenarios; estate planning review and recommendations; and education planning with funding recommendations.

Detailed investment advice and specific recommendations are provided as part of a financial plan. Implementation of the recommendations is at the discretion of the client.

The fee for a financial plan is predicated upon the facts known at the start of the engagement. Since financial planning is a discovery process, situations occur wherein the client is unaware of certain financial exposures or predicaments. In the event that the client's situation is substantially different than disclosed at the initial meeting, a revised fee will be provided for mutual

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agreement. The client must approve the change of scope in advance of the additional work being performed when a fee increase is necessary.

After delivery of a financial plan, either verbal or written, future face-to-face meetings may be scheduled as necessary. Follow-on implementation work is billed separately.

Business Planning Agreement In some circumstances, a Business Planning Agreement is executed in lieu of an AM Agreement when it is more appropriate to work on a fixed-fee basis. The Business Planning Agreement will detail the services that will be provided.

Hourly Planning Engagements Abens Financial Services, Inc. provides hourly planning services for clients who need advice on a limited scope of work.

Termination of Agreement A client may terminate any of the aforementioned agreements at any time by notifying Abens Financial Services, Inc. in writing and paying the rate for the time spent on the investment advisory engagement prior to notification of termination. If the client made an advance payment, Abens Financial Services, Inc. will refund any unearned portion of the advance payment.

Abens Financial Services, Inc. may terminate any of the aforementioned agreements at any time by notifying the client in writing. If the client made an advance payment, Abens Financial Services, Inc. will refund any unearned portion of the advance payment.

Although the AM Agreement is an ongoing agreement and constant adjustments are required, the length of service to the client is at the client's discretion. The client or the investment manager may terminate an Agreement by written notice to the other party. At termination, fees will be billed on a pro rata basis for the portion of the quarter completed at the time of termination. The portfolio value at the completion of the prior full billing quarter is used as the basis for the fee computation adjusted for the number of days during the billing quarter prior to termination. Adjustments will only be made on billing amounts greater than $50 or for individual withdrawals over $10,000.

Fees and Compensation

Description Abens Financial Services, Inc. bases its fees on a percentage of assets under management, hourly charges, and fixed fees (not including subscription fees).

Financial plans, Business Planning and Hourly Agreements are priced according to the degree of complexity associated with the client's situation.

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